Even if it's fake, I don't see how it could electrocute her to death. Maybe she could have touched the AC power outlet, but at it seems like this thing at worst (sending the AC through the wire) would short out instead of sending the current through the body.
To give just one example, if the charger had put a full 220V AC on the ground line of the charging cable, but didn't have a voltage differential between the ground and 5V power wire, the iPhone itself would see 0V and just think the cable was unplugged, but (assuming the case is grounded through the dock connector--I've never checked) the outside case of the iPhone would be sitting at 220V relative to ground. If it was sitting on a relatively nonconductive surface, nothing would happen.
The woman then touches the phone with, say, her other hand on something grounded--a metal chair touching the floor, for example, or the wall, or even a lamp. Now there's a path for 220V to flow from the case of the iPhone directly through her heart to her other hand. Which stops her heart and kills her.
It's really not particularly difficult to imagine. A properly designed charger (that's what that little "UL" symbol is supposed to mean) would short itself out to the neutral and cause the circuit breaker to trip if such a failure occurred, but a badly designed one, maybe not.
Or there could have been something additionally wrong with the wiring in her house--for example, the neutral wasn't bonded to ground and had gotten pulled high somehow, and the badly-designed charger didn't isolate that.
I once had a broken VCR--major US brand--that had something like 30V AC on the case at any time it was plugged in. A cat had peed in it, of course, but while it SHOULD have just shorted out and protected the user, it failed in such a way as it didn't.
If you have enough current at only 1 volt going straight through someone's heart, yeah. Through skin on the hands, no. I would have been dead from a car battery.
50VDC is the rule of thumb for dry skin, which is why (I assume) the US phone system tops out at 48V. For practical purposes, anything above 30V is considered potentially hazardous. Under that and you can put your hand on it and nothing will happen (which is, again, why most power bricks top out at around 24V).
As you said, even small voltages could kill you, but you'd need to have it going directly through your heart, which would really take some work--extremely unlikely to happen unless you've got needles and are actively trying to do it.